Market Update: Road Ahead

If you're worried about the market, or plainly don't want to touch it with the proverbial 10-foot pole...you're in good company.

A lot of folks feel that way, myself included.

Yet while I feel that way...I've also out been there putting money to work in my personal and retirement portfolios, not to mention a slew of "buys" for subscribers in the goodBUYs portfolio over the past several months.

The reason? I've learned a few truths the hard way over the years - even with the major indexes sitting at or near all-time highs:

One of those truths is that it's better to swallow some uncertainty and start buying into a rally, even when it feels uncomfortable to do so.

Yes, you take your lumps in the process. If you look at the track record of any successful investor, you'll find a smattering of regretful losses and a lot of mediocre stock picks - and a relative handful of strong-performing "outlier" stocks.

Of course, it's quite possible the market takes a deep dive early this year.

• It did so in 2021 as it became clear the Fed was going to raise interest rates.
• It happened in January 2008 before the worst of the financial crisis swept through the economy.
• It happened in March 2000, prior to the tech bear market of that era.

And maybe it happens again here in 2024. Like I said, no one has a crystal ball on this stuff (least of all me).

But much of the time, the market does not fall off a cliff.

And then what happens... the stock market (or that favorite high-flying individual stock you always meant to buy) climbs higher without you.

Bucking the 2000-2003 Bear Market

Even when the worst does happen, it's not uncommon for at least a few stocks to buck the trend.

A good example - which I've shown before on these pages - is the behavior of travel stocks like Southwest Airlines (LUV) and Carnival (CCL) during the terrible 2000-2003 bear market:

Wouldn't it have been nice to haved owned a few of these stocks when tech stocks of that era were crashing?

We can't always predict where money will rotate. But generally speaking, when one sector's "growth story" becomes old news (or becomes exceedingly overvalued)...Wall Street finds a new growth story. Our job as investors is to keep our eyes open, and watch for evidence (in the form of higher stock prices) for those new emerging growth stories.

But the hardest part is putting money to work in those early phases, when those kinds of stocks are getting stronger month-by-month, but no one is talking about them on CNBC just yet.

My point is... in many ways, successful investing and trading is about doing what feels uncomfortable.

Even after all these years as an investor and trader...I have to will myself to buy a stock. I keep thinking "What if..." - what if the economy tanks? What if the company's business hits a weak spot?

Those are certainly risks.

But we also face another type of risk when we choose not to act...the risk of "lost opportunities."

It takes us back to where this post began...what if we don't buy a particular, favorable stock, and it takes off without us?

Best of goodBUYs,

Jeff Yastine